tv Your Money CNN February 17, 2013 12:00pm-12:30pm PST
outside and now what we show you is right here we've updated our model of los altos and there we are, there's me being held up by the cnn cameraman but you can see the image we took from across the street is part of our three-dimensional model in los altos. real time updating of a three-dimensional map. i'm trying to get to us look at things where can we go with the technology, what can we do with it and provide a little bit of how the space has evolved because i used to do similar things at google. in 2007 i came to work with google, where i ran advanced projects, where we did everything from the imaging systems for google street view to google earth to google maps to energy projects like google power meter. >> but when you look at ed lu you hear things like liquid robotics, 3-d imaging. >> right. >> and obviously b612. >> right. >> what's the unifying theme for ed lu? >> i think that ed is fascinated by the horizon, by what's over
the next hill. it could be exploring space, it could be a new vehicle that paddles its way out into the ocean, it could be finding threats to the earth. >> i think we're living in a really special time now. for 4.5 billion years this planet has been hit by large asteroids, thousands of times, and we've reached the point where we as a species have figured out the technology that we could actually stop that process on this planet. i mean think about it. we're talking about changing the actual evolution of our solar system so it's, the plan set no longer hit by asteroids. i feel we are lucky to live today, we are seeing great technical progress, we are seeing things you could in every have dreamed of even 10, 20 years ago and we're part of it. that's pretty profound. >> ed lu won't stop until his space telescope has found the asteroids headed toward earth. it's a mission few people would
even attempt, and that's what's earned ed a spot on "the next list." i'm dr. sanjay gupta, thanks for joining us, see you next week. despite a recession in europe, major mergers in the united states show evidence that business is picking up. america could be on the road to prosperity if not for our politicians standing on the way. i'm ali velshi. this is "your money." there's an economic storm hovering just off our shores. the headwinds are gathering strength as our elected official once again seem prepared to take the american economy to the brink of destruction. this time over a march 1st deadline for the across-the-board government cuts known as the sequester. >> ts is not a game. this is reality. >> i don't like the sequester. it's taking a meat axe to our government. >> these steps would seriously damage the fragile american economy. >> still fragile enough that four years after the recession
the u.s. economy actually shrank in the last three months of 2012. the storm clouds were ready to blow away and washington basically called them back. >> i think we're all aware that we have some urgent business to do. >> if not for indecisive, uncompromising, and polarizing politicians, america's economy could take off again. >> we are producing more energy and america can become an energy exporter. >> we're in the midst of an energy boom and it's lowering the price of electricity and bringing manufacturing back to america. a housing boom fueled by the lowest interest rates in history. and 35 months of private sector job creation. america's future could be great. >> i'd like to focus on what lies beyond the fiscal debate. >> i'd like to, too. but that's not possible the with a sequester deadline about to descend on the american economy. when will washington's small thinking about big problems end?
if this week is any indication, the dysfunction won't end any time soon. earlier this week we learned the euro area experienced its third straight quarter of negative growth. gdp there fell by 0.6%, the worst since 2009. europe has been experimenting with austerity. the deep cuts to government spending that have failed to turn the euro area economies around. unemployment in the euro area is 11.7%. some countries like spain and greece above 25%. washington is less than two weeks away from austerity in the form of the sequester. $85 billion in automatic across-the-board spending cuts that are set to take effect on march 1st. i'm joined by my good friend, christine romans. host of "your bottom line." john avlon is a cnn contributor and senior columnist at "newsweek" and the daily beast. margaret hoover is a cnn political contributor and republican consultant. christine, let's start with you.
economists warn the sequester could lead to a recession. that's not scaring business away. american airlines and us airways will merge. warren buffett is buying heinz. michael dell is taking his company private. there's business going on. as you've said before, uncertainty is the new normal. >> absolutely. you see these movements within the corporate sphere that are telling us that they are trying to be on the offense. at the same time, you see a retrenchment deepening in europe. that europe story is so instructive for the discussion going on about the skweser in washington. by the way, there's going to be a ten-day break coming up for your elected officials, for our elected officials, so they don't have much time to get this straightened out. when you look at companies in america and merger and acquisition activity just beginning to get going and you look at retrenchment
worsening in europe, it all spells for trouble for politicians if they don't do this right. >> but for some reason, margaret, i'm going to bring you in here, the threat of recession doesn't seem to be scaring our elected officials. >> the days of 11th hour negotiations are over. washington democrats have gotten used to republicans bailing them out of their own lack of responsibility. those days have passed. >> margaret, the cuts, the sequester, i've often referred to it as a stupid name for a stupid thing, were designed to be a poisoned pill, so draconian that they would push both parties to agree on a debt reduction plan because the consequence would be so horrible that it couldn't possibly happen. they haven't come to a deal. how do you see this fight ending? >> well, look, there's a little bit of time and news that the senate democrats are moving to put forward a proposition for a smarter prioritization of cuts that don't undermine the functioning of the federal government. that's what we're going for here. we're going for a deal that's smarter than the
across-the-board cuts that actually could hurt the economy. the republicans have passed two different versions in the house so you've got to wait 'til the senate does something and hopefully they can come together in conference and send it to the president for a signature. that's what we want to happen. it looks like harry reid is going to move something february 25th. that's the best case scenario. but if the senate doesn't move, we might just have a sequester. >> that is going to spell trouble. this comes back to america's $16.5 trillion in debt. a new poll from the pew research center shows that americans want their elected officials to stop kicking the this can down the road. 72% of americans say deficit reduction should be a top priority for the president and for congress, up 19 percentage points in the last four years. that ranks third, by the way, behind strengthening the economy and improving the jobs situation. i'm not sure how you prioritize these things, john, because they're all important, all crucial. >> that's right. >> but you say that the president is uniquely positioned
to deal with the deficit, with i is coming out as the top issue for people. why? >> absolutely. for two reasons, ali. first of all, president obama is in the sweet spot of his presidency, the moment of maximum leverage that occurs for a president right after re-election. basically around 18 months at the start of a second term where a president can push through almost anything he wants. second of all, he's positioned to pull a nixon in china. just as only a committed anti-communist like nixon could go to china, someone like a pragmatic aggressive like president obama could appeal to his base and still get tough entitlement cuts through as part of a grand bargain. this is a moment of rare opportunity but it takes presidential leadership and that, frankly, has been lacking. >> one approach that republicans have put forward is the idea of a balanced budget amendment. >> the real cause of our debt is that our government has been spending $1 trillion more than it takes in every year.
that's why we need a balanced budget amendment. >> republicans, margaret, are not blameless in this, bush era tax cuts, wars in afghanistan and iraq are major drivers. the spending cuts that a balanced budget amendment would require could cripple the economy. austerity hasn't worked in europe. why does marco rubio think it would work in america? >> look, what you have to keep in mind is when marco rubio said that. he said that in his response to the president's state of the union right before rand paul was about to give the tea party response to the state of the union. what marco is trying to do here is politically position himself as almost a unifier of the tea party and mainstream conservative fiscal conservatives in the republican party. so, look, the balanced budget amendment is red meat to the tea party. they believe in it because they want fiscal responsibility.
i think that was a political and tactical play on his part more than a reasonable or achievable fiscal possibility. >> john? >> bumper sticker politics. it's not serious. it doesn't reflect the realities of government, but it's a popular and powerful contrast the with the democrats because many states have balanced budget amendments and operate just fine. federal government is more complex but all the more reason for president obama to set a clear contrast. if the republicans want to focus slowly on spending with the example of austerity in europe, there's an opportunity for president obama to really be the advocate of a genuine grand bargain, one closing tax loopholes, entitlement reform, taking on his own base, and more measured spending cuts that wouldn't put the economy in recession. the fact congress is going on vacation with this looming says it all. >> it's unbelievable. >> it just says it all. >> no pressure from the markets. let's be honest. stocks near five-year highs, low interest rates, so there's no fire burning under these men and
women to fix it because the markets aren't screaming at them but that day could come and they're not really laying much groundwork. >> we're hoping this gets solved. margaret, john, great to see you. christine will stay. washington has big problems and most of the talk is about small solutions. but there are lawmakers in washington focused on what the country actually needs to do. i'll talk to one of them next. later, a critical moment for carnival. how could it change its public image after the cruise from hell? we'll be right back. you're watching "your money." h o so.... director's voice: cut it! ...what...what did i say? gecko? i said gecko? aw... for over 75 year...(laughs. but still trying to keep it contained) director's voice: keep it together. i'm good. i'm good. for over 75...(uncontrollable laughter). what are you doing there? stop making me laugh. vo: geico. saving people money for over seventy-five years. gecko: don't look at me. don't look at me.
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exploded upward when the 2007 recession hit. it now stands at more than $16 trillion. the sequester has been coming for more than a year with congress pushing it back to march 1st as part of the fiscal cliff deal that happened at the end of 2012. but it is already having an impact on economic growth. the commerce department says a large cut in federal spending, primarily on defense, contributed to the 0.1% decrease in gdp. that's how we measure economic growth in the united states during the last three months of 2012. democrats, including the president, are pushing for more revenue, those are taxes, mostly from ending some tax breaks. republicans, of course, say bring on that fight. >> the president wants more tax hikes that destroy jobs the democrat allies in the senate caught to take it up. this isn't what america are looking for and i think many in
the president's own party won't support those ideas. >> senator johnny isaacson joins me, he's a republican from georgia, he's a former businessman and in my opinion, a very reasonable guy. senator, you were on the show in mid-january. we discussed the debt ceiling. you voted against the deal to suspend the debt ceiling with 34 of your fellow senators but it passed anyway. what do you need to see in a bill to avoid the sequester sometime between now and the end of february? >> ali, first of all, as someone who did run a business for 22 years, i'm embarrassed about the way we're operating the country right now and i want to say that up front. sequestration is a bad idea. we ought to be doing our business, appropriating and budgeting, making decisions on cost-benefit analysis. these continual deadlines and cliffs is no way to run a country much less a company. >> when you run a company, you have these things called poison pills. that's what the sequestration was. right?
something to awful it would prevent a certain course of action from taking place. why is it that elected officials don't treat that the same way that you would if you were in business? if you had a poison pill in your business to say if you don't do something x will happen or if you do x would happen, you'd avoid that bad thing. >> a poison pill portends at some point in time you have to take it. congress has become an expert at pushing that pill down the road and putting it off for another few months like the proposal from the democrats now to put it off until the end of the year. it's time we got down to business of running the country like a business, appropriating, budgeting, reforming our entitlements, reforming our spending, reforming our corporate tax code. >> you mentioned the democrats' proposal. let's talk about that for a second. the democrats put out a plan last week to replace the sequester. the main points are it would delay defense cuts until next year, it would save $27.5 billion through what it calls modest defense cuts over seven years. the plan would save the same
amount by cutting farm subsidies and ending some direct payments aformers, it would enact the buffett rule, the millionaires tax, raising 55 billion that way, and it would end some corporate tax breaks and close the loopholes for the oil industry. senator, is there anything in that democratic proposal that you can support? >> well, the problem is the premise of the proposal. we got a ten month postponement of sequestration but only over ten years does it pay for the $85 billion over that ten months. we really ought to be doing what we're supposed to do, appropriate money, have the committees meet, decide where we're going to cut. make the cuts based on spending. if we have a revenue issue we ought to reform the code, not just pick on an industry like oil or aviation and try and gig them a little bit. we ought to have a comprehensive reform. >> how do you apropose we achieve that because we're working up against deadlines, because what you're talking about is a good discussion. >> i appreciate your asking the
question that way, ali, because for me i'm one of of the five republicans that voted for simpson-bowles when it was created. i'll never understand why the president blinked and didn't send it to the congress when he got it over two years ago. but that's the way we have to approach it. we have a big, big problem $16.5 trillion in debt. >> right. >> we have zero equity in our country. we're basically 100% mortgaged. it's time we sat down and realized -- >> i agree with you senator. i agree with you wholeheartedly. the problem is as you said you hate the way we run things. we're now up against a deadline in two weeks. what do we do? do we hit sequestration and have these across-the-board cuts which you as a businessman would agree are sloppy, not targeted. they're not going to work the right way, or do we what do what you're suggesting or should have done but it's going to take months? >> let me make one guess. this is just one senator's opinion. the sequestration will go in effect on march 1st. march 27th the continued resolution under which we're running the government is extended. it is an open opportunity in time where we could make those
cults in the continuing resolution for the remaining eight, ten months of the year, then take that time to make the cuts for the other nine years. it's doable if we have the intestinal fortitude to do it. >> march 28th is a day if it doesn't work the government could shut down. you don't foresee that. >> i don't foresee that happening. i think republicans learned a real good lesson back when speaker gingrich was in office, that shutting the government down say bad idea. defending the country is important. making sure social security checks are delivered is important. but it's a better idea to run the country like it's supposed to be run, do your responsibility, appropriate money, make cuts where you have to and if you have to change the tax code, change the tax code but do it in the sense of the macro sense, not the micro sense. >> wish we'd been doing that for the last several years. >> me, too. >> senator, good to talk to you. johnny isakson of georgia. coming up, if you think the debate over taxing and spending can get ugly, just wait until my next topic. the minimum wage, a subject that
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citibank for ipad. easier banking. standard at citibank. christine romans is back. three hot business stories this week. minimum wage, nike, and carnival. i want to start with minimum wage. i'm going to eviscerate christine, who has it all wrong. >> bring it on! bring it on! >> right now the federal minimum wage is $7.25 an hour, that's about $15,000 a year for a full time worker. the president's proposal would raise the minimum wage in three stages, reaching $9 by the end of 2015. not exactly a drastic move. this is a debate that has divided economists for decades. for every study that says it doesn't hurt jobs you can find one that says it does. it's about to divide my colleague, christine romans, and me. the host of "your bottom line."
i'm going to give you the advantage of going second. here's my take. america is the richest country in the world. the current minimum wage is a joke. if it kills jobs, then we have a bigger, deeper problem to consider. i don't care if you live in montana or manhattan, if you make $15,000 a year anywhere in america you are poor and your wage is a disgrace. at nine bucks an hour it's $18,720 if you work full-time. better, but you'd still be poor. check out australia, which has a minimum wage of almost $17 u.s. an hour. this is a moral, less of an economic issue. raising the minimum wage does mean businesses, not taxpayers, share a bigger part of the burden of poverty in this country. it's not that we can't afford to pay a higher minimum wage, christine, it's that we can't afford not to. >> i agree with you on the moral part of this, because if you think this is anything other than a moral certainty, that's the only thing we're sure about. i think we should have higher paychecks, ali. i'm not convinced raising the minimum wage won't kill jobs for
other people. we've been talking to small business owners all week. they say that they will have to lay people off to pay others more money. we're talking about minimum wage jobs here and should be talking about the jobs we need $25 or $30 an hour jobs. if this is the centerpiece of the president to boost the middle class, then he's aiming too low. this is a poverty initiative, not a middle class initiative. why? raising the minimum wage doesn't create jobs in the middle and that's what we're looking for. it's almost a distraction and it doesn't fix the underlying problem. when you can't figure out how to add good quality middle class jobs, you duck and weave and raise wages on unskilled workers because everybody wants them to make more money. you're right, it's true. the studies are all over the place. there is no clear-cut answer on whether this will kill jobs. but we do know this -- businesses with 50 or more full-time employees have to pay health care coverage for the first time next year. those business owners are struggling to survive in a world where demand is not up, their rents and costs are rising. they're scared to death. they see a president who doesn't get it. don't mistake this for a jobs
plan, this is an anti-poverty plan. i think the president's call for universal preschool does a lot more on that front than raising the minimum wage. we have to figure out how to make sure people don't get stuck in minimum wage jobs but it's a short steppingstone and there are a lot of other good jobs out there. >> i can't even disagree with you when i try to. we'll let the viewers decide who won that argument. follow us on twitter and facebook and tell us what you think about it. i've got to talk about another sports scandal, another headache for nike. nike is the sponsor behind the world's most prominent athletes, tiger, lance. this time the company's $2 million deal with oscar pistorius, the south african runner and amputee now charged with shooting and killing his girlfriend. this ad probably doesn't help. "i am the bullet in the chamber." although nike did pull it down, nike still has deals with michael vick and tiger woods but oscar pistorius may not be so lucky. >> certainly is more serious because it involves a homicide.
they should at the very least suspend their relationship until absolute determination of whether he's guilty is determined. >> christine, obviously nike can't figure out. it sponsors a lot of athletes. >> sure. >> some will do something wrong. i get when they sponsor an athlete, people might buy more of their sneakers. when something like this happens, do you think somebody is not buying a nike product because of it? >> i don't think so. they try to step back quietly, when something like this happens,. give their condolences to the family, let somebody be presumed innocent until proven guilty, and in some cases there is a rehabilitation of an athlete to recover sponsorships later. this case is different. a young woman is dead in this case. and his sponsorships in total were something like $2 million so he was very well-known in south africa, not necessarily globally. >> right. >> nike has a lot of people they sponsor. >> right. >> i think this quietly goes away and i don't think the sponsorships come back for him. >> doesn't hurt nike that much. >> it does not hurt nike, no. >> let's talk about carnival.
i've been away for most of the week but every time i turned on cnn there was something about 4 people stuck on a ship. >> and sloshing sewage in the halls of your cruiseship. this is bad for carnival, a critical moment for its management. how will it manage this public image? the carnival cruise ceo gerry cahill was very quick, ali, to apologize. >> we pride ourselves in providing our guests with a great vacation experience and clearly we failed in this particular case. >> carnival offering refunds, cash, a flight home, and cahill said he went on the ship to personally apologize to the all the passengers, but look where micky arison was this week. a miami heat game. he's the ceo of carnival corporation, the parent company which owns carnival, holland american, princess. he's also a part-owner of the heat. but he's courtside while those people are just desperate to be dockside. it's a pr nightmare. with analysts we talked to, they aren't that worried, they think people will keep wanting to book these cruises. >> cruises are good deals.